In an intensifying effort to end what the authorities see as the era of lawlessness in the cryptocurrency market, the Securities and Exchange Commission yesterday sued Coinbase, the largest crypto trading platform in the U.S., claiming that the company broke the law by not registering as a broker, the New York Times reported. The SEC filed the lawsuit a day after it accused Binance, the world’s biggest cryptocurrency trading exchange, of mishandling customer funds and lying to American regulators and investors about its operations. With these federal actions against major crypto companies, along with other lawsuits at the state level, regulators have sought to reshape the crypto sector by treating digital asset exchanges like more traditional financial firms, while pushing out individuals and companies that they view as bad actors. In its filing yesterday, the SEC detailed the ways in which Coinbase’s leaders had demonstrated that they knew how the marketing and sale of digital assets should be governed under U.S. laws, even while failing to follow them. “Coinbase has elevated its interest in increasing its profits over investors’ interests, and over compliance with the law and the regulatory framework that governs the securities markets and was created to protect investors and the U.S. capital markets,” the filing said. Coinbase went public in April 2021, an event seen as a milestone in crypto’s march into the mainstream. The company handled $830 billion worth of trades last year, with nearly nine million users making at least one trade per month. The SEC said that Coinbase had made billions easing the sale of crypto assets but deprived investors of significant protections. Its complaint, filed in federal court in Manhattan, claims that the company operated as an unregistered exchange, even though it told investors in going public that regulators might deem some of the products traded on its platform to be securities.
https://www.nytimes.com/2023/06/06/business/sec-coinbase-lawsuit-crypto…
The list of digital tokens that are deemed unregistered securities by the Securities and Exchange Commission now spans over $120 billion of crypto following the U.S. agency’s lawsuits against Binance Holdings Ltd. and Coinbase Global Inc., Bloomberg News reported. The regulator in the complaints against Binance and Coinbase cited more than a dozen major coins as assets that fall under its purview. Such a designation comes with strict investor-protection rules and could make the tokens harder to trade if exchanges shy away from listing them for fear of falling foul of the SEC. Binance’s BNB — which has a market value of $44 billion — stablecoin BUSD, Cardano’s ADA, Solana’s SOL, Polygon’s MATIC, Filecoin’s FIL and Algorand’s ALGO were among those mentioned in the Binance lawsuit. NEAR tokens and Dfinity’s ICP tokens were among those cited in the Coinbase lawsuit. When added to other tokens like XRP separately targeted by the SEC, the agency has now categorized over $120 billion of coins specifically as unregistered securities. SEC Chair Gary Gensler has long said most tokens are subject to the agency’s investor-protection laws and that trading platforms should register with the regulator. But labeling specific tokens represents a tougher approach. U.S. officials have cracked down on digital assets this year following a rout in 2022 and a series of blowups, including the bankruptcy of the FTX exchange.
